The Price / Volume Relationship

[NYCMB 10]

Seven Examples (Final Step in Similarities Section).

 

See attached.

 

Which Laterals listed comply (meets with the test provided) with those examples which exist in The Lateral Formation Drill? Why or Why not?

 

- Spydertrader

 

Answers for 7 Examples:

 

A) Laterals 1,4,6 and 7 comply with those examples which exist in The Lateral Formation Drill.

Reason: No bar penetrated upper or bottom boundary before boundary testing.

 

B) Laterals 2 and 5 don't comply with those examples which exist in The Lateral Formation Drill.

Reason: One bar penetrated upper or bottom boundary before boundary testing.

 

C)Lateral 3 doesn't comply with those examples which exist in The formation Drill.

Reason: The 2nd bar of the Lateral is FBP; it's not SYM.

[Spydertrader 10]

Three individuals have (thus far) posted the correct answers. Hopefully (by now) everyone can see how each of these correct answers form in the exact same fashion - irrespective of the number of bars contained within it the lateral itself. Now, that we can see the similarities (ensuring everyone is speaking about the same object moving forward), we can begin to learn to spot the subtle differences which indicate exactly what the market wants us to know.

 

However, before we head down that road, I encourage everyone to review the thread beginning with this post until now.

 

I think you'll find the results of your review quite enlightening.

 

- Spydertrader

[FilterTip 10]

Review my answer. My response to you should indicate the following ...

 

"While yes you did accurately assess the individual particulars of the area under discussion (decreasing volume, dominant direction, etc), you did not in your post (which listed three reasons for knowing the direction of Lateral exit), provide the additional (hence my use of "more than three [that you provided] reasons") pieces of information (context and order of events) one should know prior to reaching a conclusion about this specific event. In addition, you have not yet completed the process of understanding the simiarities of this specific type of lateral, nor have you fully reviewed the various subtle differences which would allow you to accurately see all the various information provided by the object itself. As I result, I recommend avoiding reaching any coclusions which take you outside the current area of discussion."

 

[end translation]

 

Step by step means finish one step before moving to another step.

 

- Spydertrader

Ok, have had coffee...

 

I did place this in an order of events when saying in post#1278:-

3. Both are in the Dominant direction (on the basis that they both occur post b2b).

 

Never the less, am I correct in that the discussion should be only about the type of lateral that starts with a Sym?

 

And now knowing how the only 3 ways that this type of lateral is created, namely:

 

1. Starts with a Sym.

2. That the boundaries of a lateral have a bar which creates a lateral boundary with Bar 1 of the Sym via:

a) a dominant boundary.

b) a non-dominant boundary.

3. both dominant and non-dominant boundaries.

 

that we are now to move onto the other similarities that exist within this type of lateral.?

 

Any discussion about how a lateral exit is to be had at a later date?

 

Lastly when you say:

nor have you fully reviewed the various subtle differences which would allow you to accurately see all the various information provided by the object itself.

...

has anyone yet ?

 

I have been discussing both. Namely how the "sym lateral" is created and a lateral exit.

Apologies, although hopefully some clarity has been arrived at for both.

 

Thx..

 

EDIT:

Again you have posted as I was typing this..sorry for cross over questions etc..

Edited January 26, 2010 by FilterTip

[FilterTip 10]

I can see how you can group these into those that start with a Sym, and then test the high or low of the 1st bar (without penetrating it), before penetrating the lateral boundary on a later bar.

 

However, from post #1171, I am confused a bit here. It looks like the bar 55 and bar 79 laterals fit this same pattern, but the 67 lateral does not (it starts with a Sym, but there is no bar that tests the lateral before it is penetrated). Just wanted to confirm that neither of those 3 laterals fit into the same set of laterals from the Lateral Drill.

 

I've attached the chart under discussion from #1171 for reference.

post#1215

 

Seems ptunic had already provided an answer, but there was no confirmation.

 

ptunic, where are you and are you laughing or crying?

 

..

[TheDon 10]

Tuesday, Tapes Only

 

Worked on this in real-time in afternoon and was in sync with gaussians.

 

For now though, just focusing on tapes, as I still feel not close to 100% comfortable on them.

[Spydertrader 10]

I did place this in an order of events when saying in post#1278:-

 

Let's review your question where you specifically asked for clarification:

 

Ezzy's lateral would be one that we knew would exit opposite from the direction from which it entered (entered going up, exit going down)

because it was a dominant lateral, the first bar of the lateral being on decreasing volume,

and having "created with" the upper boundary of the lateral?

 

You asked if we would 'know' based on a certain number of criteria listed. In the same question, you did not include all the criteria required to know the outcome of an event. You did correctly articulate the status of each portion of the area under discussion.

 

How should I have answered your question?

 

 

Never the less, am I correct in that the discussion should be only about the type of lateral that starts with a Sym?

 

Again, your question leaves out important criteria. TIKI's chart (that I have mentioned several times) has two laterals which start with a SYM. Are we talking about both of these laterals or just one? Again, how do you wish me to respond? Last time, I provided a detailed answer which confused you. This time a short answer is surely to facilitate additional questions.

 

And now knowing how the only 3 ways that this type of lateral is created, namely:

 

1. Starts with a Sym.

2. That the boundaries of a lateral have a bar which creates a lateral boundary with Bar 1 of the Sym via:

a) a dominant boundary.

b) a non-dominant boundary.

3. both dominant and non-dominant boundaries.

 

You see in the (directly) above question, you included all information required.

 

As such, my response to you is, 'Correct."

 

that we are now to move onto the other similarities that exist within this type of lateral.?

 

Once you learn how everything is the same, then you may move onto looking for that which presents a subtle difference within this specific pile of Laterals (as you correctly descibed above).

 

Any discussion about how a lateral exit is to be had at a later date?

 

One cannot draw conclusions unless and until one has all the information needed to reach a conclusion.

 

has anyone yet?

 

Of course not, however, that hasn't stopped anyone from reaching incorrect (and often erroneous) conclusions.

 

I have been discussing both. Namely how the "sym lateral" is created and a lateral exit. Apologies, although hopefully some clarity has been arrived at for both.

 

No need for apologies here. The point of all this is to learn a process for learning how to teach yourself how to learn to trade. People don't need books, numerous threads, me, Mak, Jack or anybody else to learn this stuff, but they must have a process in place for learning how to learn.

 

All anyone ever needs is a chart and their own brain.

 

- Spydertrader

[Spydertrader 10]

Tuesday, Tapes Only

For now though, just focusing on tapes, as I still feel not close to 100% comfortable on them.

 

Since you are already using Trade Navigator Software, you might want to download the Special File known as PVFiles. It might make your life a bit easier.

 

See Instructions here.

 

- Spydertrader

[FilterTip 10]

Let's review your question where you specifically asked for clarification:

 

You asked if we would 'know' based on a certain number of criteria listed. In the same question, you did not include all the criteria required to know the outcome of an event. You did correctly articulate the status of each portion of the area under discussion.

 

How should I have answered your question?

 

I was merely confused by your answer.

On the one hand you listed, one by one, the 3 reasons why we would know how the lateral would exit, and these confirmed what I had said (asked).

You added the necessity of "order of events" (which I had included in a prior post but as you correctly now highlight I did not include above), which makes 4 reasons, however you then concluded saying that we would know with the 3 reasons how the lateral would exit.

 

I just didn't follow everything you said and asked for clarification in that respect.

 

Again, your question leaves out important criteria. TIKI's chart (that I have mentioned several times) has two laterals which start with a SYM. Are we talking about both of these laterals or just one? Again, how do you wish me to respond? Last time, I provided a detailed answer which confused you. This time a short answer is surely to facilitate additional questions.

 

Until today I didn't know how to define the particular lateral type that starts with a sym and has a bar that creates a lateral boundary with bar 1 of the sym.

Having done so I therefor thought this type of lateral was what we were discussing.

I hadn't referred to TIKI's chart when I asked this.

In this sense it is not important.

It is unfortunate that you are expecting me to be so clear about things that I am obviously confused about. but I doubt that it's easy for either of us or anyone to deal with such a complex issue via this medium.

Once you learn how everything is the same, then you may move onto looking for that which presents a subtle difference within this specific pile of Laterals (as you correctly descibed above).

No this is confusing me.

So there are more similarities to see before moving on to deal with differences within these specific type of laterals or there are not?

One cannot draw conclusions unless and until one has all the information needed to reach a conclusion.

This means what?

This was regards your comment about "step by step" and that the topic was about defining a type of lateral and not about how a lateral exits.

 

Of course not, however, that hasn't stopped anyone from reaching incorrect (and often erroneous) conclusions.

Does this not highlight the last point?

That we are not to move on until the lateral definition is completed?

No need for apologies here. The point of all this is to learn a process for learning how to teach yourself how to learn to trade. People don't need books, numerous threads, me, Mak, Jack or anybody else to learn this stuff, but they must have a process in place for learning how to learn.

 

All anyone ever needs is a chart and their own brain.

 

- Spydertrader

 

Whilst I thought I had confused things by trying to discuss both lateral type and lateral exit, it is now apparent that both have indeed been discussed.

Your post#1253

I suggested whether the very same type of Lateral formed on increasing or decreasing Volume might represent a subtle difference - in other words, a way one can know how the market plans to exit the lateral in question.

and post#1254

Again, the whole point of the exercise is for a trader to learn how to know which direction Price must head as it exits the Lateral.

 

So hopefully you can see where and how I'm getting lost?

You said:

Step by step means finish one step before moving to another step.

This is why I asked, in as simplistic terms as I know how, as to the order of progress having defined the 3 ways that one type of lateral is made.

 

But now, I do not know where the lateral type and lateral exit discussion ends and begins.

Asking questions in order to obtain that clarity is leading to further confusion.

Will it stop me from asking question? No.

 

It isn't always the question that leads to confusion.

I will need to just keep asking until I understand the answer I get or get an answer I understand.

 

Thanking for what you have confirmed or otherwise in your reply to me post# 1306 and

in continued appreciation of your time and effort Spyder.

Thx

[zt379 10]

sorry posted in wrong thread..wheres the delete post option?

Edited January 27, 2010 by zt379
post deleted

[Spydertrader 10]

Seriously, folks. This ain't that damn hard.

 

Start with a Sym pennant. At some point in the future another Bar creates a Lateral boundary with Bar 1 of The Sym Pennant. Said Bar does this to the Dominant side of the formation, Non-dominant side or Both. No limit exists between Bar 1 of the Sym and the bar which creates the lateral boundary as long as no bar between the two exceeds the extremes of Bar 1 of the Sym.

 

Now, you have a set of Laterals on which you can place your focus. Laterals which form in a different way, you can differentiate at another point in time. For now, act as if they do not exist.

 

We now have a group of Laterals where we can easily differentiate.

 

1. Bar 1 Direction - Dom vs Non-Dom

2. 'Forming Bar' Lateral boundary - Dom vs Non-Dom Side

3. Volume (all bars)

 

If it helps, you might try sketching things out on paper in an effort to 'see' the various situations which develop. However, do yourself a favor and start with a Three Bar Formation before moving onto any other types. Doing so, you'll soon see how many of the possible permutations do not have any effect in the overall outcome.

 

Once you can see the various situations, you then focus on Order of Events (noting any differences from one situation to another). For example, the lateral which formed today beginning with the 11:10 Bar began at a completely different point along the continuum than 'Ezzy's Lateral.'

 

Lastly, everyone needs to spend some time focusing on context in an effort to understand the differences which exist here.

 

The end result of all this is you'll know (each and every time) based on the current context, and the current Order of Events, and finally, the actual formation of the Lateral itself exactly what Gausian Annotation the market has indicated for your chart. As such, you'll know what must come next with respect to the specific action required of you (the trader) - hold or reverse (if already in the market) or enter or wait (if you are sidelined.

 

- Spydertrader

[romanus 10]

...

Once you can see the various situations, you then focus on Order of Events (noting any differences from one situation to another). For example, the lateral which formed today beginning with the 11:10 Bar began at a completely different point along the continuum than 'Ezzy's Lateral.'

 

Just to clarify something, defining the boundaries of the lateral as Dom or Non-dom appears to be contingent on the order of events. In other words if one is unable to determine the correct order of events in real time, one could mistakenly conclude that the lateral in the attached has it's upper boundary as Non-dominant with respect to the drawn in red down container and as such compare it to the other similar laterals in the attempt to determine the direction of BO.

 

Am I correct in looking at this as a catch-22 situation: if one knows the order of events in Real Time, one annotates the laterals appropriately with what is expected, and if one doesn't:shrug: ...

[bericheson 10]

Hello Everyone. First post. I've been following the thread for a couple of months and I've managed to read thru all posts a couple of times. I've also read most of the old thread on ET. I have an observation or two, as well as many questions, so please hang in there with me.

 

Hats off to Spyder for such a massive undertaking. I cannot imagine the commitment he has made in time and energy. I do agree with the previous poster - transference is probably very difficult thru this medium. A lot of charts are posted and it's next to impossible to know which, if any, are correct. I do think it would EXTREMELY helpful to many of us if, from time to time, we had some way to know what/where/when a specific fractal completed. I have found myself referring back to the tape example on 08/04 because it was confirmed.

 

I'm very appreciative of the recent help Spyder has provided with differentiating laterals. I get the dom/non-dom concept of laterals, and I'm sure it will be even more helpful as we learn how to differentiate further. However, it's the "context" thing which gives me the greatest challenge. So often I'm uncertain about where we are in the order of events. A specific example would be 1140 on 01/25. To me that looked like another r2r which must complete. Does anyone else find themselves struggling with such events? Can someone explain to me why that was not a r2r at 1140? Could it be because of the 1055 lateral - perhaps 1130 was non dominant because of the lateral and therefore we didn't have a valid r2r? Any feedback appreciated and I look forward to participating.

[romanus 10]

A specific example would be 1140 on 01/25. To me that looked like another r2r which must complete. Does anyone else find themselves struggling with such events?

Yes.

I do.

That object appeared to be r2r, but it obviously wasn't.

[bericheson 10]

Yes.

I do.

That object appeared to be r2r, but it obviously wasn't.

 

Thanks for your reply. I have received a few PM's suggesting that others have the same problem. I had a lat at 10:55 (not conforming to the latest drill) and I'm curious if maybe that had some effect on the formation of a r2r at 11:40. For instance, maybe we need two bars of increasing vol after a formation breakout to give us another r2r? Anyone have ideas to bounce around?

[Spydertrader 10]

Just to clarify something, defining the boundaries of the lateral as Dom or Non-dom appears to be contingent on the order of events.

 

Then name the differences anything you like. Up / Down, Left / Right, Goat / Hedgehog or whatever other binary pattern suits you. The vocabulary isn't nearly as important as recognizing a subtle difference in the object itself (at this point in time). For example, the first example of a Lateral (today), moved in the opposite direction of the previous bar (Note, how I did not use Dominant nor Non-Dominant here). Whereas, yesterday's examples formed in the same direction as the previous bar (to the actual lateral). Clearly, such a thing would represent a subtle difference.

 

At some point in the future (once you do have a better handle on Order of Events), you can always change the vocabulary.

 

- Spydertrader

[romanus 10]

Thanks for your reply. I have received a few PM's suggesting that others have the same problem. I had a lat at 10:55 (not conforming to the latest drill) and I'm curious if maybe that had some effect on the formation of a r2r at 11:40. For instance, maybe we need two bars of increasing vol after a formation breakout to give us another r2r? Anyone have ideas to bounce around?

I am afraid I have no constructive feedback to offer as my approach to solving this is somewhat different. Due to axiomatic nature of Price Volume relationship, which is based on the premise that "the sequences are always completed", it logically follows that the object that only appears to be r2r is in fact not r2r if it is not followed by 2b2r.

[Ezzy 10]

Just to clarify something, defining the boundaries of the lateral as Dom or Non-dom appears to be contingent on the order of events. In other words if one is unable to determine the correct order of events in real time, one could mistakenly conclude that the lateral in the attached has it's upper boundary as Non-dominant with respect to the drawn in red down container and as such compare it to the other similar laterals in the attempt to determine the direction of BO.

 

Am I correct in looking at this as a catch-22 situation: if one knows the order of events in Real Time, one annotates the laterals appropriately with what is expected, and if one doesn't:shrug: ...

 

I know what you mean. This reply from Spyder was helpful in the way I viewed Dom/Non-Dom: http://www.traderslaboratory.com/forums/34/price-volume-relationship-6320-31.html#post87580

 

My previous view of the retrace (referred to in the link) was it was non-dom retrace, and so was the lateral which formed within it. But it was DOM on the retraces fractal, the retrace went B2B.

 

So you could "almost" say any lateral forms in the dominant direction of something. We had a b2b, so we had a dominant direction. If formed post pt3 of that b2b, we're still dominant of something. If it started non-dom of that fractal only then would it be considered a non-dom lateral.

 

It may be self evident, but it was an aha for me.

 

So the "larger", big picture, whatever, order of events weren't as much of a factor in this case.

 

And agree differentiating can get really screwed up if your context is wrong and comparing apples to oranges. Happens to me a lot, especially when you don't know you're doing it believing you have correctly annotated a chart - it really can get you :frustrated:

 

In some cases the context won't matter as much, but yeah, your not alone.

[treeline 10]

We now have a group of Laterals where we can easily differentiate.

 

1. Bar 1 Direction - Dom vs Non-Dom

2. 'Forming Bar' Lateral boundary - Dom vs Non-Dom Side

3. Volume (all bars)

 

If it helps, you might try sketching things out on paper in an effort to 'see' the various situations which develop. However, do yourself a favor and start with a Three Bar Formation before moving onto any other types. Doing so, you'll soon see how many of the possible permutations do not have any effect in the overall outcome.

 

Attached is an attempt to list all possible permutations of a 3-bar Lateral Formation which conforms to the drill. I found 48 possible permutations, based on the above 3 characteristics. Next I'll try to determine which of these do not have any effect on the overall outcome. After that I will proceed to focusing on Order of Events and, finally, Context.

Edited January 27, 2010 by treeline
spelling

[Ezzy 10]

Four laterals for today. (Edit: Make that five) The last one forms with both dominant and non-dominant boundaries.

Edited January 27, 2010 by Ezzy
failure

[Spydertrader 10]

Four laterals for today. The last one forms with both dominant and non-dominant boundaries.

 

Five.

 

- Spydertrader

[double eagle 10]

Five.

 

- Spydertrader

 

The 5th one has bar 1 at 13:35.

[saturo 10]

Regarding the mystery r2r on 1/25... a few things to keep in mind:

 

1) Trends overlap

 

2) The farther "down the rabbit hole" you go - it becomes more and more likely that you will not clearly see all volume sequence components neatly on their own bar or bars on the 5 minute chart.

 

For example take a look at 13:30 on the same day... there is a r2r that begins off of the peak there - but this information gets a bit lost on the 5 minute chart. The 2b 2r are much clearer. They overlap with the next trend.

 

I've always thought of this problem as a quantization problem... like sampling music. The 5 minute quantization boundaries are not always going to land on the "best spots" to give you a crystal clear picture.

[cnms2 10]

... A specific example would be 1140 on 01/25. To me that looked like another r2r which must complete. ... Can someone explain to me why that was not a r2r at 1140? ...

Post a snippet of that chart fully annotated. It's easier to comment when we all look at the same picture.

[bericheson 10]

Post a snippet of that chart fully annotated. It's easier to comment when we all look at the same picture.

 

I hope the attachment appears correctly. I look forward to reading your comments as this seems to be a problem with nearly every chart I try to annotate.

[cnms2 10]

I hope the attachment appears correctly. I look forward to reading your comments as this seems to be a problem with nearly every chart I try to annotate.

Asumming your annotations up to that bar are accurate, you're post Pt3 of an R2R2B2R container (purple). The r2r that can be seen post Pt3 is on the next faster fractal and it happens when the Pt2 to Pt3 sub-container's RTL is crossed. At this point you notice that the last red bar hits a lower low on decreased volume, compared to the Pt2 volume (Jokari). So you can anticipate that the events to come are: black volume, sub-container's RTL BO, etc..

 

PS: If I were to post that snippet I would've included more bars to the left (e.g. from 15:45 previous day), and the time axis info as well.